TEN ROLE MODELS IN WICKEDNESS
In response to the many sms that I reveived from friends and one request from an avid reader of my blog I present below the whole article on the above topic.
9. Li Zongwu.
In response to the many sms that I reveived from friends and one request from an avid reader of my blog I present below the whole article on the above topic.
Most modern finacial scams pale in comparison with those of earlier centuries. Morgen Witzel unveils his top ten of all-time villains.
Are we sinking into a moral abyss? In fact, it could be argued that the ethical and moral standards of our day are no worse than those of many past times. In the US in the late-nineteenthy century, for example, the era of the Robber Barons, greed was not only condoned but admired. If you made money in an underhanded manner, well, that just proved what a clever fellow you were.
And some of these people were very clever. Some othe their methods bordered on genius. They excelled in the arts of wickedness, in ways that out modern-day wrong-doers can only admire. Here, in ascending order, are the candidates for the 10 most unethical business people who ever lived and worked.
10. Anonymous.
In London in 1720, at the height of the South Sea Bubble, an individual operating under a false name printed and distributed a prospectus for a business to be capitalised at GBP500,000 and offered five thousand shares at a value of GBP100 each. To obtain shares, investors needed only to put down a deposit of GBP2 per share. The venture was described as 'a company for carrying out an undertaking of great advantage, but nobody to know what it is'. Despite this , within six hours, more than a thousand people had paid their deposits. The man closed his office and departed for the Continent the same evening, never to be heard of again. What takes the breath away is the sheer contempt in which he held those he fleeced. He knew he did not even need to tell them what they were investing in; they would hand over money anyway.
In his 1911 book The Theory of Thickness and Blackness, Li Zongwu argued that in any sphere of activity - politics, law, business - the two essentials are a 'thick face' and a 'black heart'. Thick face meant the ability to conceal one's true thoughts from others; black heart meant ruthlessness, the willingness to sacrifice the interest of others for one's own. To Li, all that mattered were one's own kin and family; everyone else and everything else was expendable. Li's principles became particularly popular in Chinese business circles in the 1920s and 1930s.
One disgusted Australian academic maintains that the book should have been subtitled ' How to Screw Foreigners'. Li's ideas contributed to an image of China as a place where foreign businesses were to be swindled and fleeced, an image China still struggles to shake off to-day.
8. John Law.
A Scottish-born economist living in Paris, in 1716 John Law set up the Mississippi Company, which was given a monopoly on overseas trade, and took charge of the national debt. In 1720, he also became controller general of finances in France. He drove up the price of shares in the Mississpippi Company by nearly 400 per cent and instructed the French central bank to print millions of banknotes so that people could afford to buy shares.
Law himself did not profit by this. As an economist, he believed that money had no value and was only a means of exchange, and one theory is that this exercise was a bizarre gare aimed at proving his point.
Before the end of 1720, the bubble collapsed, the paper currency lost all its value and the entire French economy was effectively wrecked. Law fled the country, later dying in poverty in Italy.
7. Lorenzo di Tonti
An Italian banker living in France in the seventeenth century, Lorenzo di Tonti invented the investment scheme known as the tontine. People subscribe a fixed amount of capital, which is then invested and which pays them an annual dividend. Whever a member of a tontine dies, his or her capital is divided among the other members and their dividentds increase accordingly. Not all tontines are scams, but most were. Common ploys included the managers creaming off most of the investment income and paying only a fraction to the investors, or simply taking the captal and vanishing into thin air. But even when tontines are run honestly, there are strong ethical implications. Tonti and his successors effectively invited investors to bet on the death of other people and their own survival. People are known to have murdered other tontine members in order to increase their own dividends.
6. Gregor MacGregor
In the early-nineteenth century, Gregor MacGregor looked around for a business venture in South America in which he could persuade people to invest. Unable to find one, he simply made one up - not just a company but an entire country. He claimed to have been made prince of Poyais, an honour conferred upon him by a native American ruler, King George Frederick Augustus 1 ( a fine old native American name, to be sure ).
He founded a company for the exploitation of Poyais, sold land rights, raised bank loans and issued GBP200,000 worth of bearer bonds in the name of the government of Poyais. He even encouraged colonists to set out, selling them gear and passage on ships bound for Poyais. Eventually the settlers returned with the news that Poyais did not exist. MacGregor had already decamped to France, where he set up and ran a similar scheme; then, discovering that the fuss had died down in London, he came back to Britain and ran the same scheme again, not even bothering to change the details. Many criminal charges were brought against him but none were ever proven. He retired a wealthy man.
5. Daniel Drew.
A farm boy from New York, Daniel Drew got his start in business as a cattle dealer. Cattle were sold in the market by weight and Drew discovered that, by pumping each cow full of water before the sale, he could increase the weight by as much as 50 pounds and profit accordingly. Later he went into railways, taking control of the Erie Railroad and manipulating its share price repeatedly for his own profit. When a rival Robber Baron, Cornelius Vanderbilt, launched a takeover bid, Drew ordered the company secretly to issue tens of thousands of new shares,. Each time Vanderbilt got close to a controlling interest, Drew simply printed more shares. Eventually the price of the shares collapsed; Drew then bought them up at rock-bottom prices. He made huge profits, while not only Vanderbilt but many small investors lost fortunes.
Evnetually Drews's complicated financial affairs unravelled; he went bankrupt in 1873 and died in poverty. Watered stock, whether cattle or shares, remains his legacy to the world.
4. Alexei Stakhanov.
Top management has no monopoly on fraud. In 1935, the Russian coal miner Aleksei Stakhanov reported to his superiors that in the course of a six-hour shift his team had managed to produce 102 tons of coal, 14 times the average rate of productivity. He attributed this success to superior organisation and working methods. The Societ authorities praised Stakhanov to the skies. He was pulled out of his mining job and made consultant to the entire Soviet mining industry, advising on how to improve productivity.
All over the country, miners were ordered to work to new production targets set by Stakhanov. But they were given no tools and no training in his methods, and most failed. They and their families were then sent to labour camps in Siberia, where thousands of them died. Stakhanov was made a Hero of the Societ Union in 1970.
In 1988, Russian journalists discovered that there was no Stakhanov system; he had simply bribed several other team foremen to add their production figures to his. He had profited, at the expense of the lives of many thousands of his comrades and their wives and children.
3. Charles Ponzi.
Born in Italy, Charles Ponzi went to the US in 1903. In 1913, he established an investment scheme in Boston with the purpose of exploiting differences in exchange rates for international reply coupons. But instead of profits the scheme yielded heavy losses. Ponzi realised, however, that as long as he kept new money flowing into the scheme, he could continue to pay the promised returns to investors out of his newly acquired capital, while pretending that this was investment income.
By promising ever higher rates of return, he was able to attract more and more credulous investors and keep the scheme afloat. In 1920, one of his own employees blew he whistle and it was quickly discovered that Ponzi's investment company had debts of $7m. The subsequent financial crash brought down several banks in Massachusetts and plunged the state economy into a short-lived depression. Arrested and imprisoned, he was later released and sent to Florida, where he tried his hand at several varieties of real estate fraud, again with short-term success. He died in obscurity in Brazil, having spent most of his adult life either engaged in financial fraud or in prison paying the consequences.
2. John D. Rockefeller.
John D. Rockefeller built the largest oil company in the world and was regarded as a hero by millions of Americans. But his business empire was built using fraud, deception, intimidaion and violence. Starting after the American Civil War with a single small oil company, Rockefeller gradually took contorol of the entire oil industr, establishing a monopoly. He offered to buy up his rivals; if they refused to sell, his methods ranged from economic boycotts to intimidation of the owners and their families and staff, arson and ever murder. Thos sho did not join Rockefeller were forced out of business and never worked in the oil industry again. For years, his company, Standard Oil, did not pay a penny in taxes.
Dragged before US congressional investigators, Rockefeller claimed he had no knowledge of the affairs of the business he ran; on one occasion, he even denied knowing that it was in the oil business.
He gave millions to charity, almost certainly to distract attention from his other activities. Eventually a crusading journalist exposed the truth and, after a long court case, the US government ordered Standard Oil to be broken up.
1. Basil Zaharoff.
Born in Greece of Russian ancestry, by the age of 35 Basil Zaharoff had already been arrested for bigamy and fraud. This did not stop Nordenfeldt, the first company to make and sell submarines on a commercial basis, from hiring him as agent in the Medirerranean. Zaharoff's tactics had the simplicity of genius. Having first sold a submarine to the Greek navy as a secret weapon to used against Turkey, he approached the Turks and sold them two submarines to counteract the Greek menace. He then went to Russia and persuaded the navy there to buy four submarines to negate the advantage held by the Turks. The commission on these contracts lone made him a rich man.
But that was only the beginning. Zaharoff went on to sell machine guns for the Maxim company - using bribes to secure contracts - and then helped engineer its takeover by Vickers, gaining a seat on the board and having himself appointed chief commercial agent on the Continent.
Now he profited both ways: every sale earned him a commission and the profits to Vickers paid him a dividend. He developed "le systeme Zaharoff", a refinement of his earlier method: sell a quantity of arms to one country, then inform its enemy and offer to sell them an equal or greater quantity. He bought a newspaper in Paris and ordered it to print a fictitious story to the effect that France was proposing a huge military expansion, then rushed copies to every major political figure in Germany. Within a week, the German government announced that it was doubling its expenditure on armaments - and Zaharoff was there to sell them.
After the first world war the British press accused Zaharoff of playing a leading role in the arms race that was itself a cause of the war, and branded him the "Merchant of Death". Undeterrred, Zaharoff moved to Monte Carlo, where he bought the casino and married a duchess. The richest man in Europe, he died peacefully in his bed at the age of 87.
For selfishness, greed and callous disregard for humanity, it is hard to think of his equal.
Morgen Witzel is honorary senior fellow at the School of Business and Economics, Exeter University, UK.
NB: Readers might better frauds to reveal.
6. Gregor MacGregor
In the early-nineteenth century, Gregor MacGregor looked around for a business venture in South America in which he could persuade people to invest. Unable to find one, he simply made one up - not just a company but an entire country. He claimed to have been made prince of Poyais, an honour conferred upon him by a native American ruler, King George Frederick Augustus 1 ( a fine old native American name, to be sure ).
He founded a company for the exploitation of Poyais, sold land rights, raised bank loans and issued GBP200,000 worth of bearer bonds in the name of the government of Poyais. He even encouraged colonists to set out, selling them gear and passage on ships bound for Poyais. Eventually the settlers returned with the news that Poyais did not exist. MacGregor had already decamped to France, where he set up and ran a similar scheme; then, discovering that the fuss had died down in London, he came back to Britain and ran the same scheme again, not even bothering to change the details. Many criminal charges were brought against him but none were ever proven. He retired a wealthy man.
5. Daniel Drew.
A farm boy from New York, Daniel Drew got his start in business as a cattle dealer. Cattle were sold in the market by weight and Drew discovered that, by pumping each cow full of water before the sale, he could increase the weight by as much as 50 pounds and profit accordingly. Later he went into railways, taking control of the Erie Railroad and manipulating its share price repeatedly for his own profit. When a rival Robber Baron, Cornelius Vanderbilt, launched a takeover bid, Drew ordered the company secretly to issue tens of thousands of new shares,. Each time Vanderbilt got close to a controlling interest, Drew simply printed more shares. Eventually the price of the shares collapsed; Drew then bought them up at rock-bottom prices. He made huge profits, while not only Vanderbilt but many small investors lost fortunes.
Evnetually Drews's complicated financial affairs unravelled; he went bankrupt in 1873 and died in poverty. Watered stock, whether cattle or shares, remains his legacy to the world.
4. Alexei Stakhanov.
Top management has no monopoly on fraud. In 1935, the Russian coal miner Aleksei Stakhanov reported to his superiors that in the course of a six-hour shift his team had managed to produce 102 tons of coal, 14 times the average rate of productivity. He attributed this success to superior organisation and working methods. The Societ authorities praised Stakhanov to the skies. He was pulled out of his mining job and made consultant to the entire Soviet mining industry, advising on how to improve productivity.
All over the country, miners were ordered to work to new production targets set by Stakhanov. But they were given no tools and no training in his methods, and most failed. They and their families were then sent to labour camps in Siberia, where thousands of them died. Stakhanov was made a Hero of the Societ Union in 1970.
In 1988, Russian journalists discovered that there was no Stakhanov system; he had simply bribed several other team foremen to add their production figures to his. He had profited, at the expense of the lives of many thousands of his comrades and their wives and children.
3. Charles Ponzi.
Born in Italy, Charles Ponzi went to the US in 1903. In 1913, he established an investment scheme in Boston with the purpose of exploiting differences in exchange rates for international reply coupons. But instead of profits the scheme yielded heavy losses. Ponzi realised, however, that as long as he kept new money flowing into the scheme, he could continue to pay the promised returns to investors out of his newly acquired capital, while pretending that this was investment income.
By promising ever higher rates of return, he was able to attract more and more credulous investors and keep the scheme afloat. In 1920, one of his own employees blew he whistle and it was quickly discovered that Ponzi's investment company had debts of $7m. The subsequent financial crash brought down several banks in Massachusetts and plunged the state economy into a short-lived depression. Arrested and imprisoned, he was later released and sent to Florida, where he tried his hand at several varieties of real estate fraud, again with short-term success. He died in obscurity in Brazil, having spent most of his adult life either engaged in financial fraud or in prison paying the consequences.
2. John D. Rockefeller.
John D. Rockefeller built the largest oil company in the world and was regarded as a hero by millions of Americans. But his business empire was built using fraud, deception, intimidaion and violence. Starting after the American Civil War with a single small oil company, Rockefeller gradually took contorol of the entire oil industr, establishing a monopoly. He offered to buy up his rivals; if they refused to sell, his methods ranged from economic boycotts to intimidation of the owners and their families and staff, arson and ever murder. Thos sho did not join Rockefeller were forced out of business and never worked in the oil industry again. For years, his company, Standard Oil, did not pay a penny in taxes.
Dragged before US congressional investigators, Rockefeller claimed he had no knowledge of the affairs of the business he ran; on one occasion, he even denied knowing that it was in the oil business.
He gave millions to charity, almost certainly to distract attention from his other activities. Eventually a crusading journalist exposed the truth and, after a long court case, the US government ordered Standard Oil to be broken up.
1. Basil Zaharoff.
Born in Greece of Russian ancestry, by the age of 35 Basil Zaharoff had already been arrested for bigamy and fraud. This did not stop Nordenfeldt, the first company to make and sell submarines on a commercial basis, from hiring him as agent in the Medirerranean. Zaharoff's tactics had the simplicity of genius. Having first sold a submarine to the Greek navy as a secret weapon to used against Turkey, he approached the Turks and sold them two submarines to counteract the Greek menace. He then went to Russia and persuaded the navy there to buy four submarines to negate the advantage held by the Turks. The commission on these contracts lone made him a rich man.
But that was only the beginning. Zaharoff went on to sell machine guns for the Maxim company - using bribes to secure contracts - and then helped engineer its takeover by Vickers, gaining a seat on the board and having himself appointed chief commercial agent on the Continent.
Now he profited both ways: every sale earned him a commission and the profits to Vickers paid him a dividend. He developed "le systeme Zaharoff", a refinement of his earlier method: sell a quantity of arms to one country, then inform its enemy and offer to sell them an equal or greater quantity. He bought a newspaper in Paris and ordered it to print a fictitious story to the effect that France was proposing a huge military expansion, then rushed copies to every major political figure in Germany. Within a week, the German government announced that it was doubling its expenditure on armaments - and Zaharoff was there to sell them.
After the first world war the British press accused Zaharoff of playing a leading role in the arms race that was itself a cause of the war, and branded him the "Merchant of Death". Undeterrred, Zaharoff moved to Monte Carlo, where he bought the casino and married a duchess. The richest man in Europe, he died peacefully in his bed at the age of 87.
For selfishness, greed and callous disregard for humanity, it is hard to think of his equal.
Morgen Witzel is honorary senior fellow at the School of Business and Economics, Exeter University, UK.
NB: Readers might better frauds to reveal.
2 comments:
thank you sir
i should find this book "The Theory of Thickness and Blackness".
you should google up "Thick Black Theory" and you'll find something interesting about the chinese...err.. their other way of thinking.. i mean the dark side.
"when you conceal your will from others, that is Thick. When you impose your will on others, that is Black (Dark)." Thick Black Theory describes the ruthless, hypocritical means men use to obtain and hold power: "thick faces" (shamelessness), "black heart" (cruelty), according to author's view of history"
thank you again.. i learn something new today. have a nice day
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